Friday, 24 February 2017

More Trouble for Uber: 100,000 Drivers in India Went on Strike

For the past two weeks more than a 100,000 Uber drivers in Delhi and Bangalore, two major cities in India, went on strike, demanding better pay and representation from the Silicon Valley ridesharing company. It was the third wave of driver strikes to hit Indian cities this year, and one of countless demonstrations since Uber came on the market.

But in the $68-billion company's largest market outside the US, Uber isn't the only bad guy in town. Drivers from Ola, an Indian ridesharing service valued at $3 billion, joined the strikes in Delhi and stayed off the city roads for almost two weeks.

Ola is currently leading the Indian cab market, surpassing Uber in both revenue and customers. The brainchild of two Indian engineers, the company launched in 2011 and operates out of 102 Indian cities today, as compared to Uber's 30-city reach.

While both companies have made a sizable dent in transportation infrastructure, drivers say there are too many of them on the app now and have seen their monthly income plummet as a result.

The base rate of an Uber or Ola ride in India can be as low as 6 rupees (about nine cents) to the kilometer. Drivers from both companies have been demanding a hike to the base rate, which currently stands lower than government-fixed fares for local taxicabs and three-wheeled auto rickshaws. They are also asking that Ola and Uber cut smaller commissions from drivers and curb the number of cabs on the app.

In other Asian markets, most recently in Taiwan and South Korea, Uber got its comeuppance in part for posing a threat to local cab companies. But in India, the ride-hailing service has fought neck-to-neck with its local incumbent for years. Similar to other countries, many drivers in India work for both Ola and Uber since neither company technically employs drivers on its platform.

Meanwhile, this week's strikes in Delhi left millions of commuters crowding the city's overburdened buses and subways or coughing up cab fares two or three times higher than the normal rate.

The unrest in Delhi petered out Wednesday, but then a flare-up emerged on the same day in Bangalore, a southern city of 9 million that's commonly referred to as India's Silicon Valley. Protests took a turn for the worse when a number of drivers pelted stones at an Uber office in Bangalore and attacked operating cabs, as reported in The Hindu.

Ganesh Reddy, a biotech professional in Bangalore told Motherboard that the strikes disrupted his family's commute twice in ten days. "In the last few days, both my daughter and wife were asked to get out of the cab halfway after the driver aborted the trip."

While Ola turned down requests for a comment, Uber sent Motherboard a statement that had little to do with the welfare of its drivers.

"We're sorry that our service has been disrupted in Bangalore. We're aware of isolated reports of threats and intimidation from a small group of people. We again call on the authorities to put an end to this illegal behavior. We are committed to ensuring that drivers who wish to work are able to do so, and riders can get from A to B conveniently, reliably and safely."

The strikes in Delhi died down on Thursday, when representatives from Ola and Uber met with government officials, along with drivers from both companies. The government's role was largely diplomatic, but drivers are hoping an agreement will be reached.

"It is difficult for the government to direct the companies as they are not violating the laws," said a Delhi-based transportation consultant, who asked to remain anonymous because he works with the government. "I don't see any major intervention by the government in this matter."

After growing outrage from the public, the taxi-booking service was temporarily blacklisted from the capital and made some enemies for running illegally in the city. But it kept growing—and sealed its commitment to the Indian market by promising a $1 billion investment in July 2015.

Given the Indian government's lukewarm response to each passing strike, it's easy to see why these disruptions might appear more like growing pains to Uber and its homegrown competitor rather than a viable threat to the two companies' chokehold on the coveted Indian market.

"I don't see that [the strikes] will have any long term impact on the companies," said the Delhi-based transport consultant. " This will be alarm bell for the companies to shift quickly towards profitability and cut down on incentives and discounts."

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